Getting a mortgage with bad credit

It’s possible to get a mortgage with bad credit, although you’ll probably pay higher interest rates and you may need to come up with a larger deposit. There are mortgages designed for people with poor credit, and some lenders specialise in offering these. These are known as bad credit mortgages, adverse credit mortgages, or sub-prime mortgages.

Remember, you should only get a mortgage if you can afford the monthly repayments. If you can’t keep up with them, you may lose your home.

What is bad credit?

You might think you have bad credit because you’ve been rejected for credit in the past. But remember, different lenders have different criteria for lending money – some lenders may see you more positively than others. So there’s no hard and fast rule of what’s considered bad credit. However, there are certain factors on a credit report that would make most lenders think you’re a higher risk – like missing credit card payments, defaulting on a loan, and applying for credit too often.

If you think you have bad credit, it’s a good idea to sign up for a free Experian Account to get your Experian Credit Score – this will give you an idea of your credit situation and how lenders may view you.

How do ‘bad credit’ mortgages work?

‘Bad credit’ mortgages are just like regular mortgages, except they’re likely to come with high interest rates and there could be a lower limit on how much you can borrow. You might also be asked to come up with a larger deposit of at least 20-25% of the value of the property, rather than 5-10%.

This is because having a lower credit score can be viewed as a high risk by the lender. Usually, the higher your credit score, the better your chances are of getting approved and getting lower interest rates. Use our calculator to find out how much can you borrow for a mortgage, how much you'll pay each month, and how much interest you'll pay in total:


What this means

Your monthly repayments contribute to both repaying the money you've borrowed, as well as paying interest charges.

The total amount you repay is a combination of the mortgage debt and the interest charges accrued over the lifetime of the mortgage.

Note that this mortgage calculator assumes your interest rate will remain the same for the full term of the mortgage, and you are on a capital repayment, rather than an interest only, mortgage.

Can I get a mortgage with bad credit?

When you apply for a mortgage, lenders will check your credit history to understand how well you manage your finances. They’ll also need to see your income, monthly outgoings and savings - what you earn and what you spend. This is to ensure you can afford the monthly repayments, especially if things change - like interest rates going up, or your income going down.

It’s possible to get a mortgage with poor credit, but it helps to show yourself in the best possible light. That means taking care of your credit history and budgeting sensibly.

  • Show lenders you’re a responsible borrower by meeting all your regular payments – e.g. utility bills and credit card payments – on time and in full.
  • Review your spending – try to reduce costs where you can, and keep your monthly outgoings consistent. Aim to have money left over at the end of each month.
  • Try to review your credit report regularly - make sure it’s up to date, and that the information on it is accurate. If you do find anything that needs correcting, contact the relevant lender and ask for an amendment – or get in touch with Experian, and we’ll speak to the lender for you.
  • If you have a good explanation for past financial difficulties, such as redundancy or ill health, consider adding a note of correction to your report for lenders to see.
  • Only set your sights on a property you can realistically afford, as there aren’t too many mortgages around at 95-100% loan to value.
  • You may need a guarantor, typically a parent or an older relative, to reassure lenders that monthly payments will be covered if you can’t keep up with them.
  • You can check your eligibility for a mortgage with Experian. Whether you’re a first-time buyer, moving house or looking to re-mortgage, we can show you which lenders are more likely to accept you.

Remember, you’ll also need a decent deposit in place – at least 10-20% of the property price.

Can I remortgage with bad credit?

If you already have a mortgage and you want to remortgage or refinance with bad credit, the first step is to keep up to date with your monthly payments, to prove to the lender that you’re a responsible borrower.

The lender will also want to see how your repayments impact your outgoings in general, and what percentage of your income it is. They may also look at how much of your home you’ve paid off so far.

How your credit score can help you get a mortgage

Before you apply for a mortgage, you can get an idea of how lenders may see you by checking your credit score.

It’s based on information in your Experian Credit Report, which is one of the factors lenders can use (along with other information you’ve given in your application) to decide whether to accept you or not.

Lenders like to see someone who can make monthly repayments on time, and who can keep control of their overall debt. Successfully managing simple credit accounts like a credit card, a mobile phone contract and some household bills should help your credit score go up over a short period of time. Remember, not every lender uses the exact same factors, and they may score based on different factors.

To help put yourself in a better position for lower interest rates and better mortgage conditions, see what you can do to improve your credit score.

Compare mortgages with Experian

Getting help with debt

If you’re worried about money, you’re not alone. There are many debt charities and companies that offer free independent advice for everyone. They can advise you, and could act on your behalf to help with any debts you might have.

MoneyHelper is a free, government-backed money guidance service – their site includes a handy Debt Advice Locator tool that can help you find confidential debt advice. Other places to turn include:

National Debtline Logo

National Debtline
StepChange Logo

StepChange Debt Charity